MBA Mortgage Applications lost their footing during the July 25th week, declining -2.2% vs. +2.4% prior (-30.2% YoY). Purchases edged higher at +0.2% vs. +0.3% prior (-11.8% YoY) and refinancing fell a sizeable -4.0% vs. +4.1% prior (-41% YoY). The average interest rate for a 30-Year conforming loan remained flat for the third consecutive week at 4.33%. ADP Employment Change disappointed expectations of 230K, coming in at 218K vs. 281K prior which points to slightly weaker expectations for Friday’sNonfarm Payrolls. GDP increased at an annual rate of 4% in the second quarter advanced estimate and the first quarter GDP was revised to -2.1%. The increase in real GDP Q2 primarily reflected positive contributions from personal consumption expenditures (+2.5%), private inventory investment (+1.6%), exports (+9.5%), nonresidential fixed investment (+5.5%), state and local government spending (+3.1%), and residential fixed investment (+1.9%). At 11:00 AM (PDT)the Fed releases their statement and rate decision and consensus is for a $10 Billion decrease in asset purchases coupled with a stagnant 0.25% rate decision. Treasuries have tumbled to session lows following the hotter than expected GDP report and the curve has bear steepened with 2s10s up 1.6 bps.
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